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    Denise Purcell
    The Specialty Food Association’s January Specialty Food Live! virtual marketplace event showcased more that 10,000 new products and created nearly 16,000 connections between makers and buyers over four days, as well as featured 13 sessions to inform about the latest research insights, trends, and innovations; recognize leadership; and provide industry roundtable discussions.
    Here are some takeaways from the information-packed sessions. 
    “An act of kindness of strangers may not solve every problem we have, but it gives us hope and that’s a lot and the impact of the kindness will affect future generations. I’m feeling blessed that Angkor Cambodian is able to give back.”
    Channy Laux, CEO of Angkor Cambodian Food, who survived the Cambodian genocide and labor camps before coming to the U.S., on winning an SFA 2021 Leadership Award for Citizenship. Read more.
    “How are you able to react faster to trends that change? You have to have more options. I think you’ll see a lot of bigger retailers broaden their supplier base to have more options.”
    Greg Sarley, SVP of merchandising revenue at Harry & David, on identifying the right supply chain partners, and having backups for issues that arise. Full session.
    “Finding out what ‘real’ meant was the biggest project. We made it our mission to define what that actually meant, and we recognized how important it is to know where your food really comes from.”
    Dan Wise, founder and CEO of ready-to-eat meal delivery service RealEats America Inc., on working to improve the food system. Full session.
    “People who are saying restaurants are dead and everyone is going to cook at home are giving consumers way too much credit. We love to travel and love to eat and can’t unlearn those behaviors.”
    Jonathan Deutsch, professor of culinary arts and science at Drexel University and director of the Drexel Food Core Lab, on the balance of cooking at home trends post-COVID. Full session.
    “A lot of people are looking for more transparency in their food. We try to make it easy for people to know what type of systems they are supporting.”
    Alita Kelly, founder of South East Market, which emphasizes sourcing local farms and businesses that are led by women and minorities, as well as those that are actively supporting environmental sustainability. Full session.
    “Quantifying the impact [a company] is having may be something that continues to emerge as a differentiating point.”
    Melanie Bartelme, global food analyst for Mintel,  on the trend of companies showing how the money from their ethical business practices are supporting communities. Full session.
    You can download full sessions from Specialty Food Live where the links are provided. Sessions are free for SFA members and $19 for non-members.

    Laura Lozada
    Calling All SFA Members!
    First, let me introduce myself … I’m Laura Lozada and I recently joined an already vibrant and service-minded group of membership staffers at SFA as the VP of Membership. 
    I might be a new face to some of you, but I’ve been around the SFA block a few times. I’ve been happily employed here for 20+ years providing member services and support activities; usually found behind the scenes, running events, education and way back when – finance. Now, I’ve shifted efforts to focus more specifically on the heart of our organization – you guys, the members!  And I couldn’t be happier.
    That’s why I couldn’t let this moment slip past without giving a Community Hub shout out and call for nominations for the next group of intrepid members willing to volunteer time and help govern the SFA.
    Want to join us as a volunteer leader... Act now!
    Sounds like an infomercial, right?  “ACT NOW!”  But seriously, we need to hear from you via the nomination form online by the end of this month if you want to be a volunteer and be considered for any of the four exciting opportunities we have.  This opportunity is open to all members in good standing (this means dues paid!)  Speaking of dues – we are abuzz at SFA about your positive response to the most recent member benefits, including Specialty Food Live!, Infinite Aisle, and the Virtual Tasting Experience. And we rely heavily on member dues to fund program development just like this. 
    Back to volunteering. You may have noticed that we’ve changed the process some in recent history, so we now hold elections annually. This means you have this opportunity for one solid month a year to get your name into the running to volunteer as someone to tackle a position on the Association or Foundation Board of Directors or the Association Committees and Industry Work Groups. 
    You can find out more about each of these opportunities as well and submit your own nomination online here.  Even if this isn’t the year for you, keep us in mind if you want to do it next year and you can expect the exact same process each year moving forward.
    We are here if you have questions throughout the application process. We’ve been tweaking that too – and hope to have made it easier as well.  Let us know how we are doing or ask questions at volunteer@specialtyfood.com Deadline to submit a nomination is February 28, 2021

    Arielle Feger
    The Specialty Food Association is continuing both its Ask the Experts and Rise to the COVID-19 challenge webinar series as the pandemic continues to impact the specialty food industry. Webinars are held weekly with recorded versions available for download in the specialtyfood.com Learning Center. Webinars are free for SFA members and $19 for non-members.
    Here are highlights from some of the latest webinars:
    Every retailer has faced challenges during the pandemic. In Culture Will Carry Us Through, Matt Caputo of Caputo’s in Salt Lake City shared how the retailer has adapted while supporting artisanal brands and preserving the elements that made it succeed in the first place—culture, crew, and community.
    The pandemic may still be here, but so is the Small Business Administration. In Relief During COVID-19: SBA Programs that Can Help, Peter Fehnel, supervisory economic development specialist & veteran business outreach officer, summarized SBA’s activity over the past nine months and provided an update on current activities including the Economic Injury Disaster Loans and the Paycheck Protection Program.
    PPP Forgiveness is not granted automatically; it is the borrower’s responsibility to submit the required paperwork to PPP lenders. In this webinar about PPP Forgiveness Application and EIDL Reconsideration Requests, Man-Li Lin, economic development specialist at SBA’s New York District Office, shared information about qualifications and instructions for PPP Forgiveness Forms, and the documents you’ll need to submit and maintain.
    With a shrinking center store, SKU rationalization, and space increasingly at a premium in perishable categories, getting item acceptance and making it to the shelf is becoming more difficult than ever before. Case Pack Optimization: A Hidden Growth Opportunity takes fresh look at the Specialty Food Association study on case pack optimization. Jim Wisner of Wisner Marketing, who authored the original study, shared new market dynamics that make this issue more important than ever before.
    Buyers want to do business with certified women- and minority-owned businesses. During this webinar, Demystifying Certification, LaKesha White, Women’s Business Enterprise National Council, and Constance Jones, National Minority Supplier Development Council, shared valuable information about their organizations, the certifications they offer, and certification criteria and process.
    Visit the Learning Center to download these and many other webinars in the series.

    Denise Purcell
    The winter issue of Specialty Food magazine is typically where we look at the trends expected to influence the industry for the next 12 months, be it flavors and ingredients, or developments in how and where consumers are shopping.
    Unfortunately, waves of COVID-19 are still rampant and sticking close to home will continue for the foreseeable future. The pandemic has caused major shifts in food preparation and consumption, evident in most of the trends we discuss in this issue.
    Several of the SFA Trendspotter panel’s picks for the top trends of 2021 revolve around COVID-19 and its implications. The new normal means preparing meals and snacks at home, often as the whole family continues to navigate school and work under the same roof day after day. Not only are many center-store pantry categories experiencing the COVID boom but experimentation and engagement in food prep may be one of the few bright spots of this bleak time.
    Excitement and discovery consumers once found in restaurants or through travel has been curtailed because of lockdowns and economic concerns. The home kitchen is the new place to seek out ingredients and recipes that will stave off meal monotony. Restaurant-quality condiments, cooking sauces, and cocktail mixes are in demand as are ingredients that will bring global flavors to everyday dishes. According to Acosta data in our feature, Pandemic Trends Carry Into 2021, sales of premium and super-premium packaged foods are up across households of varying income levels as consumers look to replace some of their restaurant dining at home. On top of that, several products are coming to market that are selling whimsy, from maple syrup with edible glitter to hot chocolate bombs, adding what the Trendspotters’ dubbed “eatertainment” to mealtime.
    In fact, food has been a point of connection throughout these long months. Social media has become part entertainment, part resource with everything from Zoom dinner parties, to Instagram quarantine-meal shots, to YouTube breadmaking lessons. This is true across age groups: Emerging platforms like Twitch, a live video streaming service, and TikTok, a short-form video sharing app, both skew toward Gen Z and younger, and food-related videos are surging in both. Case in point: Chile Gushers, something I only know about because my 11-year-old niece saw it on TikTok and informed me it was a trend we should write about. You can read more in Trends & Happenings but in short, these chile candies are a take on traditional Mexican confections that are finding new life in the U.S. thanks to a post gone viral.
    As we head into 2021, it’s looking very much like a significant number of consumers will continue to cook at home, at least until restrictions on restaurant operations have ended. Products that keep meals interesting, video and recipe content, and meal kits sold at retail or by restaurants depending on off-premise sales can all help them have some fun while doing so. 
     

    Arielle Feger
    The Specialty Food Association is continuing both its Ask the Experts and Rise to the COVID-19 challenge webinar series as the pandemic continues to impact the specialty food industry. Webinars are held weekly with recorded versions available for download in the specialtyfood.com Learning Center. Webinars are free for SFA members and $19 for non-members. 

    Here are highlights from some of the latest webinars: 

    The continuing coronavirus pandemic keeping record number of people close to home, growing social awareness affecting purchasing decisions, and a maturing Gen Z population, are driving the food trends that will dominate in the new year, says the Specialty Food Association Trendspotter panel. In Top Food Trends for 2021, Trendspotters Wendy Robinson, senior buyer, Market Hall Foods, and Clara Park, corporate chef of Culinary Innovations for Chelten House Brands, and Denise Purcell, SFA’s director of content, discussed the top trend predictions for 2021.

    Consistently delicious products create brand loyalty. In Own Your Flavor Profile: Get the Specs Straight, product quality expert Nancy Jo Seaton explained the importance of clear product specifications to guarantee consistent quality. This webinar also highlighted the importance of holistic descriptions and clear communication with co-manufacturers.

    With the massive growth of DTC and Amazon combined with the growth of click and collect and delivery on the retail side of our business, you need to figure out your digital spend. How can you efficiently find your consumer when, where, and how they want to buy your product? Steve Gaither, CMO at CA Fortune explained how in Understanding Shoppable Content: DTC, Amazon, Click & Brick, and Brick & Mortar.

    Building a successful Amazon business can feel like a full-time job. In Keys to Successful Sales on Amazon with Brand Force Digital, former grocery Amazon vendor manager, Clint George of Brand Focus Digital, provided strategies that can help propel an Amazon business to the next level. George shared how to create attractive Amazon listings, use Amazon Advertising to increase your ROAS, and much more.

    Visit the Learning Center to download these and many other webinars in the series.

    Denise Purcell
    The continuing coronavirus pandemic keeping record number of people close to home, growing social awareness affecting purchasing decisions, and a maturing Gen Z population, are driving the food trends that will dominate in the new year, says the Specialty Food Association Trendspotter panel. This group of retailers, chefs, food writers and educators, and market analysts, has weighed in on the top trends for the next 12 months. Here's some of what you can expect to see:

    Eating/Cooking at Home. The reality of at-home meal preparation and consumption will stay with us in 2021, but has also brought about several subtrends. "At-home eating will be the name of the game in 2021,” says Melanie Zanoza Bartelme, global food analyst at Mintel and member of the Trendspotter Panel. “We will see consumers looking to brighten and enliven the monotony of preparing so many meals in a row."
    Restaurant Food in the Home Kitchen. With economic concerns not easing and the potential for more lockdowns during the upcoming winter, consumers are looking to replicate restaurant experiences in the home kitchen. We’ll see more restaurant-quality condiments, cooking sauces, and cocktail mixes, say the Trendspotters. Examples include smoked watermelon salt for use on fruits and vegetables; a sauce that combined the seven toppings of the classic Chicago Hot Dog into one condiment; sliced Calabrian chiles; and cocktail mixes like a smoked maple old-fashioned syrup for at-home bartending.
    Twists on Classics. Reimagining traditional recipes and products will keep consumers from becoming bored with their meals and snacks in the coming year. Examples include products like vodka and tomato ketchup, a twist on vodka sauce; aged cheddar granola; everything bagel broccoli bites; sheep’s milk chocolate; mint-flavored pasta; and beetroot-flavored drinking chocolate powder.
    Eatertainment. The events of 2020 left no one unscathed. “These are serious times and with some areas still experiencing closures in theaters, stadiums, concert halls, and other entertainment venues, we are looking to have fun at home,” says Trendspotter Jonathan Deutsch of The Drexel Food Lab at Drexel University. Novelty products are bringing some whimsy and entertainment to the home kitchen. Trendspotters point to maple syrup with edible glitter; pretzel bread mix; a unicorn s'mores skillet kit; hot chocolate on a stick; edible spoons in sweet and savory flavors; and reusable lunch box packaging with llamas and unicorns.
    Values-Based Buying. Consumers are becoming more conscious shoppers when choosing which brands to support with their food dollars. They are seeking out companies owned by women, Black people, people of color, B Corps, sustainability-focused brands, and those with ethical labor practices. "For me, 2020 highlighted topics amongst all brands: cultural appropriation, community impact, ethical practices. More than ever, brands are focused on these three categories and trying to align their messaging with this,” says Chef Tu David Phu, a Trendspotter Panel member. “Movements like #metoo and #blacklivesmatter have empowered consumers to voice their opinions on what they expect from their favorite brands. This pivot/shift is mainly due to Generation Z coming into the consumer marketplace as adults. Food brands need to shift now as this new demographic is taking over the marketplace."
    Global Travels at Home. With consumers sticking closer to home, global flavors offer culinary adventure in lieu of traveling, especially from less-familiar countries and regions. "I'm seeing more prominence and appreciation of regional ingredients from parts of the world often overlooked—specifically, an interest in West African ingredients and cuisine,” says Dawn Padmore, vice president of culinary marketing and events, Karlitz and Company. Products and flavors from Scandinavia, Cambodia, and Senegal are trending with ingredients like sea buckthorn; Cambodian chile pastes; fonio, an ancient grain from Senegal that continues to gain attention; Caribbean and Latin-American flavored pre-made beans; and spices that focus specifically on herbs or plants native to regions such as West Africa, Latin America, and Southeast Asia.
    Functional Ingredients. The pandemic also has put health concerns front and center and they will seek functional ingredients and benefits in their foods and beverages. Products that boost immunity and manage stress will particularly be in demand. Examples include functional ghees to promote women’s health, restful sleep, and cardiovascular health; fermented honey sauce; and prebiotic-laced snacks for digestive health with reported immunity-boosting functionality. “These have been huge for years, the difference is the hot functional ingredients change every couple of years. Right now mushroom powders (reishii, lions mane, etc.) are still rising, turmeric is already mainstream (golden lattes), CBD is huge—and deserves its own category,” says Andrew Freeman, founder of af&co./co-founder of Carbonate.
    Plant-Based Continuing Revolution. More a movement than a trend, plant-based earns a spot on this year’s list for its burgeoning growth during COVID-19 and for new formats that continue to transform the food and beverage market. During surge shopping in the spring, plant-based enjoyed a boost in most categories, especially milk and other dairy and meat alternatives. According to the SFA’s State of the Specialty Food Industry report, 2020-2021 Edition, the segment has huge runway for growth, increasing 10-20 percent annually through 2024. New products and applications include meatless mixes for at-home cooking; dairy-free queso made with aquafaba; cashew cheesy sauce; plant-based tzatziki; oat milk chocolate; and cactus-based tortilla chips. Trendspotter Chris Styler, culinary producer/product development chef and head of Freelance Food, LLC, also observes trends in “the rebranding of foods as 'plant-based' including beverages; more options for plant-based foods including plant-based protein to use for chili, soups, tomato sauce.”
    Less Sugar and Natural Sugar. Tied to attention to health, consumers are counterbalancing their desires to treat themselves with products that offer low sugar or natural sugar, or sugar alternatives.  “We will continue to see a decline in the levels of sugar in foods and drinks and an increase in the availability and popularity of alternative sweeteners like monk fruit, keto-friendly sugars and coconut sugar,” says Clara Park, corporate chef of Culinary Innovation for Chelten House Products. Trendspotters noted hot sauces sweetened with peaches; jams that relied on natural sugars from carrots and jaggery, a cane sugar consumed in Asia; traditional Carolina BBQ sauce in a sugar-free variety; and a proliferation of sauces sweetened with dates.
    Halva. Following consumers’ growing interest over the past few years in tahini sauce, then black sesame flavoring ice creams and lattes, halva is re-emerging in the spotlight. This 3000-year-old, sesame seed-based Middle Eastern confection was touted in 2020 by Ruth Reichl as good-for-you candy, thanks to its abundance of iron. Product examples include halva butter made from sesame paste to spread on toast, crackers, or in ice cream, and shelf-stable halva slices in flavors like toasted coconut and triple chocolate. Naturally vegan, halva also has plant-based appeal.

    Read more and see a full list of the 2020 SFA Trendspotters.
    Download a recording of a recent webinar on the 2021 Trends.

    Arielle Feger
    The Specialty Food Association is continuing both its Ask the Experts and Rise to the COVID-19 challenge webinar series as the pandemic continues to impact the specialty food industry. Webinars are held weekly with recorded versions available for download in the specialtyfood.com Learning Center. Webinars are free for SFA members and $19 for non-members.

    Here are highlights from some of the latest webinars:

    Foodservice can be a profitable channel for specialty food makers and the current state of the U.S. market has opened up new opportunities. In Breaking into Specialty Gourmet Foodservice, Arn Grashoff of Innovative Food Holdings, talked about the best products and formats for foodservice and how to get visibility and distribution.

    C-stores are a hot channel for specialty products, with particular appeal for consumers in the 18–23-year-old range. Max Weiner, Burdette Beckmann Inc., has sold premium products into convenience for more than 20 years. In Selling to Convenience Stores, Weiner provided tips and insights into the best products for C-stores, and how to make the channel work for your business.

    While CBD for edible products is not legal in the U.S., many companies are developing hemp-based products in anticipation of possible clearance by the FDA. In CBD in Food and Beverage: Trends and Innovation, Kay Tamillow, research director at Brightfield Group, provided insight into new product developments in the CBD and cannabis markets.

    Selling to supermarkets is a big step, and Art Papazian of ACP Management & Consulting Co. has spent his career guiding businesses through the process. In his session, Papazian discussed the importance of research, planning, and making the right connections. He also covered review schedules, forms, and budgeting.

    Max Kaniger, founder of Kanbe’s Markets, is Fixing the Food System, One Corner Store at a Time. Issues with hunger, food waste, and availability have intensified during the COVID-19 pandemic. Kaniger discussed how his organization is working to bring food to communities while sharing revenue with small businesses, and how grocers and makers can help solve the issues we’re all facing right now.

    Denise Purcell
    Specialty Food Live!, the SFA’s first virtual marketplace event, took place Sept. 21 - 25, with hundreds of buyers exploring thousands of products in SFA’s maker members’ showrooms. The event was originally slated for four days, but the exhibit portion was extended to five at the request of participants. 

    In addition to the exhibits, the event included virtual tastings and education panels. Here are some food and category trend takeaways from the sessions.
    The trend lifecycle. Trends can be mapped from inception, to adoption, to proliferation, to ubiquity, explained Mark Brandau and Carly Levin from Datassential. Kale is a good example. At inception, it’s a really early-stage trend that “consumers may be a little scared of,” said Brandau, and is found mostly at fine dining restaurants, specialty retailers, or farmers markets. Next comes the adoption stage. “This is when your obnoxious foodie friend says, ‘oh my gosh, you have to try this!’” Such foods can be found at gastropubs, fast-casual operators, and retailers such as Trader Joe’s or Whole Foods. “When a trend hits proliferation, and this is where kale is right now, you’ll start to find it in chains since it’s been adapted for mass consumption,” said Levin. “But the difference between proliferation and ubiquity, the last stage, is that in proliferation you can’t expect to pull a random stranger off the street who knows what it is, but in ubiquity you can.” Such foods can be found at family restaurants, K-12 foodservice, drug stores, and dollar stores. Read more. Center store is center stage. “It’s the year of essentials,” said David Lockwood of Mintel, referring to an array of categories meant for at-home consumption and meal preparation. According to Lockwood, their gains contributed to the overall growth of specialty food this year. The segment totaled $29 billion in 2019 sales, comprising 41 percent of the total brick-and-mortar specialty market. The COVID-19 boost was undeniable for essentials, in particular baking mixes, frozen entrees, oils, vinegars, and sauces as consumers faced stay-at-home mandates and turned to cooking and baking. Mintel predicts the growth rate for sales of food at home in 2021 will be roughly twice what it would have been without the pandemic. Read more. Immunity-boosting foods are on the rise. COVID-19 has shone a spotlight on food as medicine, with functional food and beverages that deliver immunity and mental well-being benefits being most relevant, said Shelley Balanko of The Hartman Group. “Consumers have focused on immunity, such as the link between healthy digestion and reducing overall systemic inflammation in the body,” she said. “They are thinking more about high-quality sleep and effective stress-management techniques.” Many have been trying to eat and drink more immune-supporting ingredients such as vitamin C in citrus, green tea, garlic, turmeric, and ginger. More experimental and trend-forward consumers are trying things like prebiotic fiber from resistant starches, adaptogens, and medicinal mushrooms. Read more. CBD opportunity. Tied with the rise in functional foods and beverages, customers are increasingly seeking CBD as an ingredient. Food or beverage products that aim to fill a need state (like boosted immunity or sleep enhancement) are becoming increasingly popular among consumers. Before deciding to add CBD to a food or beverage product, experts advise makers to take the time to understand the regulatory repercussions and the trends of the category. Read more. Global and regional American “travel” through food. With consumers sticking closer to home, global flavors are of strong interest. Scandinavian or Nordic cuisine has been on the radar, said Melanie Bartelme of Mintel, one of the SFA Trendspotters at Specialty Food Live!, who noted ingredients at the event including sea buckthorn and birch crystals. Cambodian chile pastes and fonio, an ancient grain from Senegal, were other global flavors noted by the Trendspotters. “There is an effort to preserve culture through food and have that taste at home,” noted V. Sheree Williams of Cuisine Noir Magazine, a member of the Trendspotter panel. The trend extends to regional American as well, said Bartelme. The concept of road trips and discovering what’s here in your backyard is increasingly appealing in the wake of COVID-19. Read more. Integrating plant-based. “The COVID-19 pandemic has acted as a catalyst to accelerate the shift from consumer demand of animal-based products to plant-based ones,” said Jans Tuider of ProVeg, who shared best practices for plant-based food makers, including categorizing plant-based products based on usage, not ingredients. ProVeg believes that the store of the future will shift towards a “protein aisle” rather than a specific aisle for meat and a separate one for plant-based offerings. Read more. Recordings of the Specialty Food Live! sessions will be available at learning.specialtyfood.com within the next month.

    Denise Purcell
    The annual 12 Under 35: Breakout Talent to Watch individuals are just what I needed right now.

    We’re all navigating a reality of business uncertainty, likely COVID-19 resurgence, brutal political division and social unrest, and discovering
    people who are making a positive contribution despite—and sometimes in response to—the tumult is even more inspiring in the calamity that’s been 2020.

    Among these enterprising young entrepreneurs you’ll read about, are a 16-year-old chef who challenged racial inequality in culinary reporting, a cultural preservationist whose CSA distributes products from Black-owned farms in North Carolina, a chef who turned his restaurant into a food bank in the early days of COVID-19, and a fifth-generation coffee farmer who is providing a more reliable income for Colombian growers. They and the rest of the members of this year’s list are a lesson in turning hurdles into opportunities.

    So, too, are the makers we highlight throughout this issue. In this Q&A Managing Editor Julie Gallagher talks with three companies who are shifting strategy in the age of COVID-19. Whether launching new items to gel with changing consumer buying habits or pushing through with initial product plans, these companies displayed agility during disruption.

    If you need more inspiration, peruse the list of 2020 sofi winners. As Ron Tanner, SFA’s vice president of education, content, and advocacy, points out, “The pandemic has challenged the supply chain, but specialty food entrepreneurs continue to show creativity in their kitchens.”

    These examples show an industry moving ahead, seizing opportunity, and innovating in ways large and small to keep competitive amid ambiguity. We have our own examples of the same here at SFA. I hope by now you’ve heard about and downloaded our new app, SFA Feed. It compiles all the useful content you are used to from us in one convenient platform. You’ll find the day’s news stories, features, Q&As, trends, the latest new product introductions from our online Product Marketplace, videos with industry leaders, SFA updates on programs and events, and the digital edition of Specialty Food magazine—all in one place to keep you up-to-date on what’s happening in our industry. And we continue to distribute our industry newsletter—renamed SFA News Daily—to showcase each day’s top news from the app.

    Our team is excited about growing this resource with even more original content, including an upcoming new podcast, to serve our audience. If you haven’t yet checked out SFA Feed, download it in the iOS App Store or in GooglePlay. It’s evolving into our main content platform for
    delivering the news, trends, products, and updates you need to know about, and the Association is proud to be innovating to bring you new and useful tools to help keep you informed.

    Denise Purcell
    Shifting channel strategy generated many comments from the supply chain during interviews SFA’s research partner Mintel conducted as part of the recently released State of the Specialty Food Industry research, 2020-2021 Edition. The interviews are included in the 125+-page full report to add insight and context into today’s market. 

    Among comments about channel evolution, companies noted that specialty brands are scaling faster than ever thanks to e-commerce and are using that channel to test the water before migrating to brick-and-mortar. Conventional retailers continue gaining ground and embracing better-for-you and specialty trends. And alternative channels are increasingly a focus among emerging specialty producers that aren’t winning traditional retail accounts at the pace they’d like or need. 

    Here are highlights of the supply chain’s responses:

    “We’ve seen huge growth in conventional stores like Kroger, Walmart, and Target. The natural category is exploding. … What we’ve seen over the last year or year and a half is that the natural world is becoming more of the conventional world.”
    —marketing coordinator for a 20-year-old, family-owned specialty food brand

    “[It used to be] that we have to get our numbers up in natural before tipping our toe into conventional grocery. Now you go everywhere. You pick the right grocery retailers, such as Safeway NorCal or Giant/Martin’s, that are much more forward thinking in the natural and organic space than other banners are. You don’t have to incubate for 3-4 years before you start leaping into grocery. Now, Walmart’s talking to every small brand, and Kroger [is too]. So the speed at which a brand could potentially scale is a lot faster now than what it used to be, if the brand has money.” 
    –co-founder of a 2-year-old sales consulting group

    “The [specialty/natural] food channel is a difficult place to make a profit in the beverage business. It’s a great place to get proof of concept and build a brand with cachet, but in the long term [focus] has to be more mainstream in most categories. I’m finding that mainstream retailers want specialty products like ours. Category managers want to have that kind of image enhancer for their categories.” 
    –owner of a 5-year-old specialty beverage company

    “It’s about not saying, “Hey, we’re going to launch in Target in 1,000 stores.” It’s actually being a little bit more restrictive with the buyer, saying “while we want to be in all Target stores, we think our strength is in [our home geographic] market right now. We’re not there yet to be in all of your locations in [another distant geography]”, for example. Our goal is to go from 50 to 100 to 500 to 1,000 stores, but I need to show proof of concept. If [the retailer] puts me in my home market, or the one I want [that’s] in the right [location]…at least if I don’t succeed, my investment is only 50 or 100 stores, not 1,000."  
    –director of growth and category management for an 11-year-old specialty dessert brand

    “In terms of getting our products launched and established, the first thing we always do is put them on Amazon, for a whole host of reasons. For one thing, it provides us with a test bed, so certain products we’ve had on Amazon long-term while we decide when the appropriate time is to launch them into [brick-and-mortar] retail. We’ve discovered things like, ”Are these pantry staples and are people repurchasing them? Do they need to be tweaked? What are the reviews like? Are these [products] fully functional?” We can use Amazon and direct e-commerce as a test bed with consumers before we go to retail.”
    –founder of a multi-brand specialty food and beverage portfolio

    “The focus right now is on alternative channels and impact. That’s been a focus for our brands for quite some time, and even more so now. What’s been on our minds a lot is just creating opportunities and connecting the brands to the right distribution channels, which are outside of the typical retailer and distribution systems. I think that’s really positive in a way, because they’re not having to jump through all of these hoops, they are able to act quickly, and form creative partnerships. Agile brands, like those we support, will be able to succeed through these challenging times.”
    –partnerships manager for a shared kitchen operator and specialty brand incubator

    You can purchase the 125-page State of the Specialty Food Industry Full Report and 10-Year Category Tracking and Forecasts (available at a discounted price for SFA members). And, download a recording of the recent webinar The State of the Specialty Food Industry + COVID-19 Impact here.

    What do you see as the channel evolution in the specialty food industry? Weigh in in the Q&A Forum.

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